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Washington

Matz interview Mid-Nov. is target for new corp CU proposal

WASHINGTON (9/23/09)--The National Credit Union Administration (NCUA) continues to develop new rules for corporate credit unions, and the board is looking to release a proposed version of these new rules by its mid-November board meeting, new NCUA Chairman Deborah Matz told News Now.

Deborah Matz

The corporate credit union situation is one of the dominant issues currently facing credit unions, and in an interview with News Now , Matz said that the NCUA also has its eye on the impact that the overall worldwide financial crisis is having on credit unions. While some past NCUA chairs have thought that the “best way to regulate was to end regulation or to modify them to provide extraordinary amounts of flexibility” to regulated credit unions, Matz believes that regulations serve a purpose, adding that she would look to propose new regulations and amend existing regulations to best ensure the safety and soundness of credit unions. However, regulations should not be excessive, according to Matz, who said that her “intent is not to over-regulate, but to have focused regulation” that protects credit union members. Communication, which Matz says can always be improved, is also a high priority for Matz, who plans to continue to hold town hall meetings with credit union officials on a yearly basis to gather input “directly from credit union staff and officers.” Regarding member business lending, Matz said that while she is an advocate of credit unions lending to member businesses, such practices can be risky and should be “done properly.” Matz opposes a statutory limit on MBL, saying that any such limit that could be imposed on credit unions is a regulatory issue and should be determined by the NCUA, “not Congress.” However, whether or not credit unions should be permitted to raise alternative sources of capital should be determined by Congress, and a resource group led by board member Hyland is developing an alternative capital proposal to submit to Congress. Matz also advised credit unions to be mindful of the concentrations of mortgages or indirect loans that they keep on their books. Matz also hopes to propose a division of consumer protection within the NCUA in 2010, whether or not the Consumer Financial Protection Agency is established in the near future. “I want NCUA to be recognized as the best regulator for consumers and that goes hand in hand with credit unions being recognized as the best financial institution for consumers,” Matz said. The change in board composition resulting from the addition of Matz, who is a Democrat, will not impact the way that the NCUA governs the credit union system, Matz added. A significant item that has been added to the regulatory agenda is the Credit Card Accountability, Responsibility and Disclosure (CARD) Act, and Matz said that while she has instructed NCUA examiners to provide some leeway to credit unions as they adapt to the new rules presented by the CARD Act, Credit unions will still have to comply “unless the law is changed.” The NCUA does not expect all credit unions to comply instantly with the new rules, but “they will have to have a business plan, they will have to allocate resources, and they will have to take steps to comply, and we’ll be examining for that,” Matz said. The NCUA examiners are meant to be an ally of credit unions, and are tasked with helping credit unions avoid “serious problems” in the future.